LEPHA I. STEUART v. WILLIAM MCCHESNEY AND JOYCE MCCHESNEY (04/30/82)

No. 81-1-40, Appeal from the Order of the Superior Court of Pennsylvania dated January 30, 1981, reversing the Decree of the Court of Common Pleas of Thirty Seventh Judicial District at No. 520 of 1977.

This is an appeal from an Order of the Superior Court*fn1 which reversed a Decree of the Court of Common Pleas of the Thirty-Seventh Judicial District construing a Right of First Refusal affecting the sale of certain real property.

On June 8, 1968, the appellant, Lepha I. Steuart, and her husband, James A. Steuart (now deceased), executed an agreement granting to the appellees, William C. McChesney and Joyce C. McChesney, husband and wife, a Right of First Refusal on a parcel of improved farmland. The agreement provided:

(a) During the lifetime of said Steuarts, should said Steuarts obtain a Bona Fide Purchaser for Value, the said McChesneys may exercise their right to purchase said premises at a value equivalent to the market value of the premises according to the assessment rolls as maintained by the County of Warren and Commonwealth of Pennsylvania for the levying and assessing of real estate taxes; provided, however, that the date of valuation shall be that upon which the said Steuarts notify said McChesneys, in writing, of the existence of a Bona Fide Purchaser.

On July 6, 1977, the subject property was appraised by a real estate broker at a market value of $50,000. Subsequently,

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on October 10, 1977 and October 13, 1977 respectively, appellant received bona fide offers of $35,000 and $30,000 for the land. Upon receiving notice of these offers, the appellees sought to exercise their right to purchase the property by tendering $7,820. This amount was exactly twice the assessed value of the property as listed on the tax rolls maintained in Warren County, it being the practice in that County to value real estate for tax assessment purposes at 50% of market value. The tender was refused, however, by appellant, who then commenced an action in equity seeking to cancel the Right of First Refusal, or, in the alternative, to have the agreement construed as requiring that the exercise price be that of a bona fide third party offer or fair market value as determined independently of assessed value. Appellees, requesting a conveyance of the subject premises for $7,820, sought specific performance.

The primary issue on appeal concerns the price at which the Right of First Refusal may be exercised. The Court of Common Pleas, after hearing testimony, held that the formula of twice the assessed value was intended to serve as "a mutual protective minimum price for the premises rather than to be the controlling price without regard to a market third party offer." The agreement was, therefore, construed as granting appellees a preemptive right to purchase the land for $35,000, the amount of the first bona fide offer received.*fn2 The Superior Court reversed, holding that the plain language of the agreement required that assessed market value, alone, determine the exercise price. We agree.

It is well established that the intent of the parties to a written contract is to be ...

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